Looming Prop 2 deadline has retailers concerned about egg supply

When California retailers were asked if they are concerned about the availability of affordable eggs in the future, David Fikes, consumer/community affairs and communications vice president, Food Marketing Institute (FMI), said they replied “yes.”“They are concerned about how they are going to meet the demand (for eggs) given the strictures around how they are to be presented and produced," Fikes told the audience at the Egg Industry Center’s Issues Forum in Indianapolis.

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iStockphoto.com/Danilin | Implementation of California’s Prop 2 has retailers in the Golden State worried about the price and availability of eggs in 2015.
iStockphoto.com/Danilin | Implementation
of California’s Prop 2 has retailers in the Golden State worried about the price and availability of eggs in 2015.

When California retailers were asked if they are concerned about the availability of affordable eggs in the future, David Fikes, consumer/community affairs and communications vice president, Food Marketing Institute (FMI), said they replied “yes.”

“They are concerned about how they are going to meet the demand (for eggs) given the strictures around how they are to be presented and produced," Fikes told the audience at the Egg Industry Center’s Issues Forum in Indianapolis. "They are most concerned about the let’s-wait-and-see approach that that they feel from the (egg) industry. They see this manifesting itself in let’s wait and see what happens in the courts in terms of the lawsuits by the states. They are concerned that (egg producers) might drag their feet enough that then they can say, you will have to give us a little more time than the January 1 deadline, we aren’t ready for this.”

Retailers in other parts of the country are also concerned about the impact that Proposition 2 may have on the price and availability of cage-free eggs in the states where they operate, Fikes reported. He said that if the state attorneys general lose their legal challenge to the California law imposing Prop 2-like standards on shell eggs brought into California, retailers worry that then the California market will suck up the supply of cage-free eggs from other states and cause a shortage of cage-free eggs in the rest of the country.

Fikes said retailers are also worried about the questions of compliance and enforcement. He said they are asking, “If the California law is upheld in court, who is going to enforce it?”

The big question that retailers have is whether California consumers are ready to pay the price at checkout for the animal care values they expressed in approving Proposition 2 by a wide margin. Fikes said that retailers are asking, “Are (consumers) willing to put their wallet where they voted at the ballot box?”

Keeping the customer happy

Fikes made two seemingly contradictory statements that he called “profound truths of retailing.” He said that in retailing, “differentiation from competition is key to success” and retailers are “incredibly imitative.” He explained that retailers will try something to be different from the rest of the pack, but that if the initiative is successful, the competition will quickly follow. For instance, if one chain makes an animal welfare statement, then it is possible that the rest will follow suit, even though the first retailer made the move by trying to be different. “It is very much a monkey-see and monkey-do industry,” he said. “We definitely see this when it comes to animal welfare.”

Fikes said that retailers define their role as selling something to the consumer. “Whether or not the retailer agrees with the consumer, if the argument is loud enough, the retailer will side with the consumer,” he said. “The protesters go to the store, not where the product is produced.” He explained that the retailer may be put in the position of trying to defend production practices that they don’t understand or don’t support. He said there are no miraculous solutions and the retailer is sometimes caught in the middle.

“The retailer will pay attention and side with the consumer if the message is loud enough even if it isn’t scientific, but when push comes to shove, they will do what the consumers want,” he said. “Retailers don’t want to take the lead on this, but they are hearing a lot from the consumers and they are getting pushed. They are looking for the industry to come up with the answers. Retailers don’t want to come up with the answers and try and convince producers.”

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